the municipalities are complicated with the national debts, though, on the whole, municipal debts are believed to be much smaller in proportion to population than in the United States.* It would seem, however, that a very moderate estimate of the aggregate of public debt, not national, in Europe in 1875 at say $3,000,000,000, and also to assume that the rate of growth of these since 1850 had corresponded with the growth of railroad and national debts. The primary object of this compilation of debts is to show the aggregate amount of funded debts negotiable in the financial centers of Europe and America, thus showing the increased demand for coin to pay interest, and it is even without the details of railroad and municipal debts in Europe, the aggregate given for Europe must be about correct.

*The annual interest on the debt of Paris, together with the amount appropriated to the sinking fund for the year 1873 was 46,170,825 francs, or about $9,230,000, thus indicating a debt (at four per cent) of about $183,000,000. The following statement of the debts of English cities is also said to have been called out by some discussions in Parliament in 1875.

Of American State debts the aggregate in 1875 was about $370,000,000,* and of county debts about $180,000,000. These two classes having increased much less rapidly than city or railroad debts.

We have, therefore, the following as the approximate statement of the aggregate of funded national, railroad, municipal and corporate debts in 1875, intended to be

*The following statement of the debts of the respective States in 1875, as compared with 1860, is compiled from an elaborate table printed in the New York Bulletin of February 8, 1876 showing the relative increase of population, taxation and debt in the several States, viz.:

The actual liquidation of this vast sum, amounting to just about eight times the total of all the gold and silver used as money in Europe and America, is of course not to be contemplated-it is impossible. In countries where the revenue is sufficient to pay the interest on the public debts and all other expenses, without leaving a deficit to be added to the principal each year, the national debts will in most cases become permanent institutions, the principal payable never, as in Great Britain; and in a few cases, as in Great Britain and the United States, the burden of annual interest may be reduced from year to year, unless the process of reduction is interrupted-as in most cases it has beenby expensive wars. But in many countries whose governments are infirm, and whose revenues are fluctuating and uncertain, the high rates of interest they are obliged to pay insures the ultimate bankruptcy of the national treasuries, and the final repudiation of the debts, as in the cases of Mexico and Spain. The very magnitude of the volume of funded debts in Europe and America is now compelling a reduction in the general rates of interest for money, a decline which it seems must become permanent as one of the characteristic features of this era of debt, and affecting all the employments of capital. Until the aggregate volume of annual interest on the funded debts of Europe and America is reduced to a point where it can be paid without distress to the com

mercial and industrial interests from which the interest is drawn, there will be frequent defaults and repudiations on large debts. This would of itself divert capital to the securities of the best credit, and by its concentration on them establish lower rates of interest for money throughout the world.

At say 5 per cent (which is probably about the average of the stipulated rates in the various classes of funded debts referred to in the preceding pages), the total annual interest amounts to about $1,600,000,000. Payment of the principal being left entirely out of the question as impossible for any considerable portion of it, this item of the aggregate annual interest is one of the three great factors in the financial problems of the time, the other two factors being the amount of non-interestbearing debt, or paper money, and the amount of gold and silver in the commercial world available for use as money.

In endeavoring to give the relative proportions of these for Europe and America, there seems no way but to include a great portion or nearly the whole of the debts of South America, Egypt and India. Portions of these are, of course, held in the countries where they were created; but it is well known that the great bulk of the South American loans, as well as those of Egypt, Turkey and India, were negotiated in London, and though the interest on these debts would be paid by the industries of the countries whence they came, the products of those industries would first have to be sold for the money of Europe.

For Europe and North America, with their aggregate of 357,000,000 of population, of which say 340,000,000 are civilized and commercial people, I should therefore

estimate the three above mentioned factors at about the

following proportions in 1875, viz.:

Paper money.

Annual interest on funded debts

Stock of gold and silver used as money..

$3,100,000,000

1,600,000,000

4,000,000,000

The next item having an important bearing on the use of money, and consequently on the demand for gold and silver, either for circulation or as bank reserves held for the redemption of paper money, is the increase of traffic. On this point there can of course be no statistics that will not be largely conjectural. As an index of the volume of traffic at any time in the past twenty years, I have assumed that the aggregate of bank clearings in the ten largest commercial cities of the United States represents about one third of the total volume of payments of money in the traffic of the country. In New York the daily average clearings of the banks, exclusive of the stock exchange transactions, is stated by the manager of the clearing house as averaging $40,000,000 per day in 1874. The average daily clearings in Philadelphia in 1874 were about $7,500,000; in Chicago, $3,500,000; in Baltimore, Pittsburgh, Cincinnati, St. Louis and New Orleans together, $5,000,000. The aggregate transactions of the clearing houses of the ten largest cities of the United States, exclusive of the stock exchange business in New York, in 1874 was about $64,000,000 daily, of which about 62 per cent was transacted through the New York clearing house. If this aggregate of $64,000,000 daily comprises, as I have assumed, one third of the total payments of money in commercial transactions, exclusive of the stock exchange business in New York, it would imply payments of currency to the extent of $128,000,000 daily, thus giving